Medicare Glossary & Encyclopedia

Program Basics

Medicare

Medicare is the federal health insurance program for people age 65 and older, some younger people with disabilities, and people with End-Stage Renal Disease. It has four parts — A, B, C, and D — that together cover hospital, medical, plan-based, and prescription drug care.

Program Basics

Original Medicare

Original Medicare is the traditional fee-for-service program run directly by the federal government. It includes Part A (hospital) and Part B (medical) and lets you use any provider in the U.S. that accepts Medicare.

Plans

Medicare Advantage (Part C)

Medicare Advantage, also called Part C, is a way to receive your Medicare benefits through a private insurance plan approved by Medicare. Plans bundle Part A and Part B, usually include Part D drug coverage, and often add dental, vision, and hearing.

Program Basics

Medicare Part A

Medicare Part A is hospital insurance. It covers inpatient hospital stays, skilled nursing facility care after a qualifying stay, home health care, and hospice. Most people get Part A premium-free at 65.

Program Basics

Medicare Part B

Medicare Part B is the medical insurance half of Original Medicare. It covers doctor visits, outpatient care, preventive screenings, mental health services, and durable medical equipment.

Prescription Drugs

Medicare Part D

Medicare Part D is prescription drug coverage sold by private insurance companies approved by Medicare. You get it either as a stand-alone drug plan (PDP) with Original Medicare or bundled inside most Medicare Advantage plans.

Plans

Medigap

Medigap — also called Medicare Supplement insurance — is a private policy that pays some of the out-of-pocket costs Original Medicare leaves behind, like the Part B 20% coinsurance and Part A hospital deductible.

Costs

MOOP (Maximum Out-of-Pocket)

MOOP stands for Maximum Out-of-Pocket. It's the yearly cap on what you pay for covered in-network medical services in a Medicare Advantage plan. Once you hit it, the plan pays 100% of covered Part A and Part B care for the rest of the calendar year.

Costs

IRMAA (Income-Related Monthly Adjustment Amount)

IRMAA is an income-based surcharge added to Medicare Part B and Part D premiums for higher earners. Social Security calculates it from your IRS tax return two years prior.

Enrollment

Initial Enrollment Period (IEP)

The Initial Enrollment Period (IEP) is your first chance to enroll in Medicare. It's the 7-month window that starts 3 months before your 65th birthday month and ends 3 months after.

Enrollment

Special Enrollment Period (SEP)

A Special Enrollment Period (SEP) is a window outside the standard windows when you can join, switch, or drop a plan. SEPs are triggered by qualifying life events like moving, losing employer coverage, or becoming eligible for Medicaid.

Prescription Drugs

Formulary

A formulary is the official list of prescription drugs a Medicare Part D or Medicare Advantage plan covers, organized by tier. Every plan has its own formulary, and the same drug can be a different tier from one plan to another.